Statement of Cash Flow Preparing an SCF is an important step in budget developme
ID: 445189 • Letter: S
Question
Statement of Cash Flow
Preparing an SCF is an important step in budget development because it helps managers to forecast the future budget on the basis of operating, investing, and financing activities. Use the information given in the table below to prepare an SCF for The Green Restaurant for the current year. When preparing the SCF be sure to determine whether the amounts are a source or uses of cash; and the appropriate section of the SCF the amount belongs to, either: operating, investing, or financing.
$116,300
$15,000
$10,000
$3,000
$16,500
$35,000
$25,000
$60,000
Net Income$116,300
Depreciation$15,000
Decrease in Accounts Receivables$10,000
Increase in Inventory$3,000
Decrease in Accounts Payable$16,500
Purchased Equipment$35,000
Payment of Long-Term Debt$25,000
Purchase of Investments$60,000
Explanation / Answer
Particulars Amount Amount Net Income 116300 Add: Non cash items Depreciation 15000 Changes in Working Capital Add: Decrease in Accounts Receivables 10000 Less: Increase in Inventory -3000 Decrease in Accounts Payable -16500 Cash from operating activities 121800 Less: Purchase of Equipment -35000 Purchase of Investments -60000 Cash from Investing activities -95000 Less: Payment of Long term debt -25000 Cash from Financing Activities -25000 Net Increase in Cash 1800
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